In the recent, published decision of Henry Ford Health System v Everest National Ins. Co., Michigan Court of Appeals docket no. 341563 (November 20, 2018), the Court of Appeals affirmed that anti-assignment provisions were unenforceable as against public policy, and found that assignments issued to healthcare providers are not invalid as “partial” assignments.
Jennifer Quinn was involved in a motor vehicle accident on July 30, 2016, after which she received treatment at Plaintiff’s facility. On July 31, 2016, she executed an assignment of rights to Plaintiff, which included the right to “pursue appeal of a payment denial . . . and/or the right to file a lawsuit to enforce the payment of benefits due. . .” On that same day, Plaintiff filed the present lawsuit, seeking payment of outstanding no-fault PIP benefits.
Defendant sought summary disposition on the basis that the policy issued by Defendant precluded the claimant from assigning her rights without Defendant’s consent, and on the basis that the assignment was invalid to the extent that it was only a partial assignment of rights, and was not an assignment to pursue the entirety of her claims. Plaintiff responded that the anti-assignment clause was unenforceable, and void pursuant to the Uniform Commercial Code (UCC). The trial court ruled in favor of Defendant, and Plaintiff appealed.
The Court of Appeals noted that, as it relates to alleged anti-assignment provisions, the policy in question stated “Interest in this Policy may not be assigned without our written consent.” “Interest” was not defined under the policy. Consequently, the Court of Appeals elected to use a broad definition of the word, and found that the policy precluded assignment of any interest under the policy, including either interest in the policy itself or interest in specific benefits arising under the policy. The Court also recognized the opinion of Jawad A. Shah, MD, PC v State Farm Mut. Auto. Insu. Co., ___ Mich App ___ (2018), finding that anti-assignment provisions are unenforceable because they violate public policy.
The Court of Appeals further disagreed with Defendant regarding the validity of partial assignments. In particular, the Court found that no-fault PIP benefits are payable as the loss accrues and the no-fault act requires multiple performances (ie. payments) by the insurer such that there is not a single, one-time payment of PIP benefits which can be assigned. Therefore, a health care provider can maintain an assignment solely for the past or present benefits related to its services, and an insurer may discharge its obligation to the insured with respect to particular benefits that have been incurred by directing payment of those benefits to the party providing services to the injured party. MCL 500.3112.
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Sarah Nadeau, Editor of the Law Fax Publication, is a Shareholder in our Detroit Office. Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com
